NZX puts FinanceWatch on ice
The NZX-owned FundSource has put its finance company research product on hold after a year of turmoil in the sector.
Wednesday, 16 January 2008
by David Chaplin
Gordon said FinanceWatch, which has been in development for over a year, was a "trial service" designed to provide fundamental analysis of finance companies to advisers but it was not intended to offer comparable ratings.
"While well received and valued by customers, recent events in the market have forced the business to choose between developing FinanceWatch into a fully fledged ratings service or suspending the service until an alternative model is commercially viable," she said. "Obviously legislative changes and attrition in the finance company sector will have a bearing on what any future FinanceWatch service may look like."
Gordon said FundSource would now focus on its "core business" of researching fund managers as well as creating a KiwiSaver ratings product.
The NZX, which paid $908,953 in September 2006 to buy FundSource from its founder David van Schaardenburg, relocated the research house in November from Auckland to Wellington. At the same time FundSource chief, Binu Paul, resigned after seven years with the researcher. Paul later resurfaced as head of institutional investment for Tyndall. According the NZX 2006/7 annual report, when it purchased FundSource in 2006 the firm's fixed assets were valued at $98,000, the brand at $512,000 and goodwill at $310,000.
Mark Weldon, NZX CEO, told ASSET magazine in February 2007 that following the acquisition of FundSource it would be "the first time we have had a direct relationship with the financial planners who make up an important sector of the financial markets".
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